The role of a revenue manager is one of the most important within hotels and similar organisations, assisting the business by optimising financial performance. However, many people remain unclear about exactly what a revenue manager is, what tasks are connected to the job, the level of education that is required, as well as the salary. In this article, you can find out more about all of these aspects and build a much clearer picture of what ‘revenue manager’ really means.
- What is Revenue Management?
- What is a Revenue Manager?
- What Are the Tasks of a Revenue Manager?
- What Skills Should a Revenue Manager Have?
- What Level of Education Does a Revenue Manager Need?
- To Whom Does a Revenue Manager Report?
- What is the Salary of a Revenue Manager?
- Revenue Manager vs. Yield Manager
- Courses for Revenue Managers
- Video: Hotel Revenue Management
- Discover the Latest Revenue Management Trends
- Revenue Management Strategies Every Revenue Manager Should Know
- 8 Revenue Management Tips
- Total Revenue Management on the Rise
- Revenue Management Blog for Revenue Managers
What is Revenue Management?
As a discipline, revenue management is concerned with using data and other information to forecast future levels of demand, with a view to optimising pricing, distribution and associated strategies. Essentially, the job of a revenue manager is to use data and forecasting to optimise a company’s financial results.
You can explore this topic in greater detail, access a working definition of precisely what revenue management is, learn about the value of forecasting, discover the main key performance indicators to track and a whole lot more by taking a look at the “Revenue Management: The Basics of Revenue Management Explained” article.
What is a Revenue Manager?
A revenue manager is tasked with keeping up with market trends, analysing data and using the available information to anticipate demand and then adjust strategies accordingly. Ultimately, the core objective for any revenue manager is to maximise the amount of money generated by selling products or services.
Achieving this will require the right decisions to be made in terms of pricing, marketing and the distribution channels that are used. Revenue managers are also responsible for providing the information to key departments within a hotel or similar business, so that they can make evidence-based decisions and achieve better outcomes.
What Are the Tasks of a Revenue Manager?
Some of the key tasks for a revenue manager include carrying out long-term forecasting of levels of demand and analysing the information to identify trends. This then makes it easier to anticipate recurring events and allows those in hotel management to understand when spikes or dips in demand are likely to occur, and why that may happen.
Beyond this, a revenue manager will usually be tasked with continually monitoring the performance of different distribution channels, including direct bookings, global distribution systems, online travel agencies and hotel metasearch engines, in order to determine which are performing best and what their return on investment is.
As a revenue management strategy progresses, it may be necessary for a revenue manager to make adjustments to the distribution channels being used, in order to achieve peak financial performance. A revenue manager may also be responsible for keeping information up-to-date across each of the different channels.
Revenue managers have a crucial role to play in facilitating collaboration between different departments by providing an overarching strategy to unite them. A typical hotel revenue manager job description will often also reference a need to identify alternate revenue sources, or new opportunities to improve financial outcomes.
Finally, one of the main tasks associated with revenue management is report writing. An individual working in this role will need to be comfortable creating reports and presenting them to senior figures in an organisation.
What Skills Should a Revenue Manager Have?
In terms of core skills, a revenue manager needs to have competency in the areas of interpreting data and carrying out statistical analysis. Organisational skills are a must, while written and verbal communication needs to be of a high level too, as a revenue manager needs to be able to report to senior leaders and speak to peers.
The role of revenue manager can be demanding, so a strong work ethic is essential. To be an effective revenue manager, you should also possess the ability to work as part of a team, and you will need to have a decent level of IT competency, including experience working with core software packages like Microsoft Word, Excel and PowerPoint.
What Level of Education Does a Revenue Manager Need?
Generally speaking, within the hotel industry, someone applying for an entry-level revenue manager role will be expected to have a bachelor’s degree in a relevant subject, with examples including hotel management, business management, accounting, economics, or any subject with a particularly strong focus on data analytics.
Substantial experience working within a hotel environment will usually be required and it would be advantageous if this experience was related to areas like pricing, distribution, marketing, or sales. A prior history of working with global distribution systems, property management systems and revenue management systems may also be needed.
To Whom Does a Revenue Manager Report?
The exact place a revenue manager sits within a hotel’s hierarchy will largely depend on the size of the hotel and whether it is part of a chain or not. Within smaller and mid-sized hotels, it is common for a revenue manager to be responsible for the revenue management of a single hotel and to report to the general manager of that hotel.
With mid-sized and larger hotels, there may be a director of revenue management to report to. If you are working in a chain, you might be responsible for anywhere from one to five different hotels. In the event that responsibility does extend to multiple hotels, you may need to report to a regional revenue manager instead of a general manager.
What is the Salary of a Revenue Manager?
The precise salary for a revenue manager will depend on a range of factors, including the size of the hotel, the country the hotel is situated in, and the precise responsibilities involved with that specific revenue management job. Additionally, your level of experience before moving into the role can have an influence on the eventual salary too.
Nevertheless, you can gain a sense of the kind of salary you might expect when working as a revenue manager in the hotel industry by visiting: https://www.caterer.com/salary-checker/average-revenue-manager-salary
Revenue Manager vs. Yield Manager
The job of a revenue manager is sometimes confused with a similar position, which is that of a yield manager. While the concepts of revenue management and yield management do share clear similarities, there are also notable differences and these differences can help to explain the ways in which the two roles differ as well.
Essentially, yield management is concerned with maximising the revenue generated from a perishable inventory. In hotels, this means maximising revenue through the sale of hotel rooms and this can be achieved through a variety of strategies, including price discrimination, which is where different customers pay different prices for the same product.
This is also true of revenue management, but the overall focus of revenue management is wider. For instance, it takes into account not only the sale of hotel rooms, but also the money that can be generated through food, drinks and other services. Similarly, revenue management also factors in the cost of distributing rooms.
In this sense, the role of the revenue manager can be viewed as being broader in focus than the role of the yield manager.
A course for revenue managers can provide you with the knowledge and qualifications to land a job and succeed in it. Generally, courses of this kind will teach about different distribution channels, pricing strategies, data interpretation, forecasting, and a whole lot more besides, ensuring you graduate with a rounded education.
Check out “Hotel Revenue Management Courses: Information + List of Educators” to find out a whole lot more about revenue management courses, what they can offer you, a list of organisations and educators that offer these courses, and information on the next steps you should look to take after you have graduated.
Discover the Latest Revenue Management Trends
The field of revenue management is constantly evolving, with new technology changing the way forecasting and distribution channels are handled, and new strategies becoming tried, tested and accepted. For a revenue manager, it is absolutely essential to understand and keep pace with the latest trends.
Read “Revenue Management Trends: Discover the Latest Developments” if you would like to explore some specific examples of current trends and gain further insight into the value of always keeping up with the latest developments.
Revenue Management Strategies Every Revenue Manager Should Know
There are certain strategies that every good revenue manager needs to know, from getting to know the market you are operating in and adopting the right pricing strategies, to embracing search engine optimisation, identifying different types of customers, and dividing the customer base into segments so that approaches can be optimised.
You will be able to find out a lot more about the revenue management strategies mentioned, while also getting information on some other key strategies that can help to boost financial outcomes and hotel growth, by checking out our previous article on the subject, “9 Revenue Management Strategies to Grow Your Hotel Business”.
8 Revenue Management Tips
Revenue management is a complicated discipline and it can be useful for any revenue manager to have access to some specific tips. For example, do you know how to create a culture that facilitates revenue management? Have you learned how to make the best use of automation? Do you fully understand how to prioritise direct bookings and why?
Read “8 Revenue Management Tips for Hotels” if you are interested in accessing some pieces of advice that can assist you with getting the most from a revenue management strategy and optimising financial outcomes.
Total Revenue Management on the Rise
Another key concept that a revenue manager needs to be aware of is total revenue management. Essentially, this is where revenue management concepts are applied to all possible revenue sources within an organisation, while concepts like up-selling and cross-selling are used to help you bring in as much money as possible.
The “Total Revenue Management: How Hotels Can Maximise Their Revenue” article goes into the concept of total revenue management in far more depth, exploring what it is, the main advantages and tips to implement the strategy.
Revenue Management Blog for Revenue Managers
Revenue management is a complex field, which requires a revenue manager to constantly keep up with the latest information, the newest technology, the emerging strategies, and more. There may also be times when a change of approach is needed, or where the plus points of a particular software solution need to be understood.
Our “Hotel Revenue Management Blog” provides regular blog posts covering all aspects of the revenue management discipline. Whether you are looking for insights into new trends, need information about revenue management courses, or are seeking out some useful tips, you will be able to find content that can assist you in your efforts.
The job of a revenue manager is crucial within hotels and similar businesses, because these individuals are responsible for overseeing strategies that can maximise earnings and reduce the costs associated with selling hotel rooms and other products or services. The role itself is varied in terms of the tasks required, and experience in the industry is usually necessary, while many vacancies will be aimed at those who have also studied a relevant course.